Interviews
Cotton planting witness a sharp drop
30 Jun '07
4 min read
Net sales of all cotton for the week ending 6/21/07 were 210,000 RB; comprised of 206,400 RB Upland and 4,000 RB Pima. This, on the surface, appears to have been a good week-and it might turn out to be. However, essentially the only buyer was China-suggesting that the price rise has jumped ahead of demand.
This must be closely watched as a number of merchants have suggested that sales have been severely reduced. Weekly Shipments remain on schedule to reach the 2006-07 USDA export estimate of 13.0 million bales as 386,900 bales were exported, comprised of 373,500 RB of Upland and 13,400 RB of Pima.
On an annualized basis U.S. textile mills used 4.9 million during May. This was marginally better than expected and keeps the U.S. on pace to meet the USDA estimate for the year at 4.9 million bales.
Friday's trading brought a new high in December, a promising signal. However, the bears point to the fact that while a new high, it is only at the very top of the current technical objective.
Too, they also point to the overbought technical signals exhibited in the market, the concern that the world market must come to grips with the 52 million-bale world carryover and the near 10 million bale U.S. carryover.
Too, China has announced that on July 10 it will release between 300,000 to 400,000 tons of cotton from its reserves (1.3 to 1.8 million bales). That action will put immediate Chinese import needs on hold.
However, the Chinese action will only account for little more than just one weeks supply for its textile mills! Thus, the bulls suggest that such action will not have a market impact. Too, they argue that if China releases stock now, that will have to buy more in the future to restock their reserves.
This must be closely watched as a number of merchants have suggested that sales have been severely reduced. Weekly Shipments remain on schedule to reach the 2006-07 USDA export estimate of 13.0 million bales as 386,900 bales were exported, comprised of 373,500 RB of Upland and 13,400 RB of Pima.
On an annualized basis U.S. textile mills used 4.9 million during May. This was marginally better than expected and keeps the U.S. on pace to meet the USDA estimate for the year at 4.9 million bales.
Friday's trading brought a new high in December, a promising signal. However, the bears point to the fact that while a new high, it is only at the very top of the current technical objective.
Too, they also point to the overbought technical signals exhibited in the market, the concern that the world market must come to grips with the 52 million-bale world carryover and the near 10 million bale U.S. carryover.
Too, China has announced that on July 10 it will release between 300,000 to 400,000 tons of cotton from its reserves (1.3 to 1.8 million bales). That action will put immediate Chinese import needs on hold.
However, the Chinese action will only account for little more than just one weeks supply for its textile mills! Thus, the bulls suggest that such action will not have a market impact. Too, they argue that if China releases stock now, that will have to buy more in the future to restock their reserves.
O.A. Cleveland
Popular News
Leave your Comments
Editor’s Pick
Dr. N Mohan
Clarks Reliance Footwear Private Limited
Dr. Sameer Sood
National Institute of Fashion Technology
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
